eTour has since been retired, since it was underused and too expensive to maintain. For its part, View BI has meanwhile been replaced with Epicor Enterprise DecisionStore for spend analytics. The invoice presentment and payment module was never really completed by Clarus, and Epicor chose not to invest in it because the company felt that procurement, sourcing, and spend analytics were the most important and most value-add midmarket SRM solutions. Indeed, electronic invoice presentment and payment (EIPP) solutions have long been offered by Ariba, Basware, and J.P. Morgan Xign.

Product Development Goes On

Since 2002, Epicor has delivered three major releases and several minor releases, especially of the Procurement module. These enhancements have all required internal development, since there have been no other SRM-related acquisitions. In late 2003, the vendor announced the release of Epicor eProcurement 7.3, a purchasing management solution that provided a connection between buyers and suppliers for the purchase of direct and indirect goods and services within the framework of defined business rules.

New in eProcurement 7.3 was the integration of inventory management and back-office purchasing modules (e.g., with the back-office purchase order approval routing and end-user requisition capabilities). Blanket purchase orders and releases was another major group of capabilities within the 7.3 release.

For example, permissions to create blanket purchase orders are configurable, and blanket orders can be used for either private or public consumption. Blanket orders’ characteristics (or specification of the goods or services that the order covers) can be specific items and quantities, a monetary amount of one or more product categories, or a general monetary amount, regardless of items or categories. Blanket orders also support effective dates and consumption priorities, while order releases can be done individually or on a schedule.

Furthermore, the proxy effective dates and organization requisition proxy group capabilities in Procurement 7.3 are associated with the ability of one user to assign another user as a proxy requisitioner or proxy approver for a specific date range. Other nifty features that were introduced at that time included one-click order copy capability, the ability to link e-mail approvals directly to the purchase order, the ability to approve from an order’s line detail, the ability to create a catalog item from a non-catalog item, and the ability to add attachments to extensible markup language (XML)-based purchase orders.

The most recent release, Epicor Procurement 7.3.6, was delivered in 2007 and featured major purchasing workflow improvements. For example, in the previous 7.3.5 release, any sourcing intent by the buyer would always come before management for approval, and also required a requisition review for non-catalog items.

However, the 7.3.6 release introduced the ability to set the pre-specified level of management approval required before sending a non-catalog order to a buyer for sourcing. Additionally, there is the ability for a buyer to submit a sourced requisition directly to management for approval within the workflow.

Moreover, line-item level approvals and disapprovals permit more granular decision making that keeps the process moving with reduced effort by all participants. Namely, approvers can change orders on the fly, while the workflow routing configuration can be based on what has changed (e.g., accounting methods, items, dates, etc.). Other noted functional enhancements were the following: a replenishment workbench, requisitions for stock transfers, ad hoc notes logs for suppliers and orders, advanced order search (by item level and keywords), and workflow configuration.

The Current State of Affairs

As with all Epicor solutions, the sweet spot for Epicor Procurement and Epicor Sourcing is the midmarket, where efficient management of corporate spend and automation of internal processes are significant competitive advantages. Epicor Procurement has been licensed by over 140 companies (not all of them have implemented it yet, though), while Epicor Sourcing has been licensed by about 20 companies. The number of Procurement users per customer ranges from 20 to 3,000.

Epicor’s SRM solutions are truly horizontal, and applicable across various industries. The majority of Epicor SRM customers are in North America, although each global sales region has Epicor SRM on its price list. Epicor Procurement is currently available in English, French, and Spanish, whereas Epicor Sourcing is available only in English.

Currently, Epicor does not actively market Procurement as a standalone solution, but has gotten a few deals that way anyway. The Epicor SRM sales pattern has shown a steady upward trend from 2003 right through to now. Since most of the low-hanging fruit in Epicor’s customer base have licensed Procurement in the 2003-2007 time frame, one could attribute the continued steady product sales to the vendor’s ongoing education of the midmarket about the importance and opportunity of spend management and related best practices.

Epicor SRM is most often sold as part of the complete Epicor solution. Thus, about 95 percent of customers that purchase Epicor SRM are buying it as part of the overall Epicor ecosystem. The fact that the vendor offers an end-to-end solution is one of the key value messages for its target market.

According to the vendor, in the midmarket the biggest competitor for Epicor Procurement is "doing nothing." If a current customer is interested in procurement, the company almost never looks beyond Epicor. If Epicor is engaged with a prospect, then procurement is most often part of a bigger deal that includes a full ERP system.

In those cases, Epicor usually competes against Lawson Software, Oracle, SAP, and Microsoft. The Microsoft Dynamics ERP products do not have their own strong procurement capabilities. Thus, they have to bring in a third-party solution, and that plays to Epicor’s benefit. Lawson, Oracle, and SAP do have their own procurement capabilities, but feature-for-feature Epicor Procurement can win.

In general, Epicor plays Procurement as a strong differentiator for a total Epicor ERP decision. When Epicor is competing in standalone SRM/procurement deals it faces off Ariba and some vertical niche players. The company has also occasionally sold Procurement into accounts that are running SAP, Oracle, Microsoft Dynamics GP, and other ERP systems, where Epicor Procurement was evaluated to be a superior solution.

Product’s “Order Winner” Traits

Packaged integration to Epicor Financials and Epicor SCM solutions and to other ERP systems results in the inherent ability to handle internal inventory orders and perform three-way matching in accounts payable (A/P). Other differentiators include configurable, point-and-click purchasing workflow automation (with no programming required), a patently simple user interface (UI), the ability to approve orders from a mobile device, "Tap Outs," "FreeForms," and a "360-degree" budget and commitment checking process.

To explain some esoteric terminology, “Tap Out” is Epicor’s term for what Ariba and Oracle call “PunchOut” and SAP calls “Roundtrip.” It is the ability to leverage suppliers’ e-commerce sites during the search, select, and shop experience as an alternative to managing supplier catalogs locally.

The Tap Out feature sends requisitioners’ credentials to the supplier site and allows them to add items to a shopping basket there. But instead of going through the “check out” process on the supplier site, the basket/shopping cart is brought back to the procurement application (via XML) so that it can be submitted through the procurement approval workflow before placing the order with the supplier.

For their part, the “FreeForms” feature provides the ability for Epicor customers to create Hypertext Markup Language (HTML) forms that become part of a requisition. A common example is for ordering business cards. Namely, the catalog online shopping item might be for a box of 1,000 business cards for US$14.95, but additional specific information for printing on the business card is required to go along with the order (name, address, phone, etc.).

To that end, a procurement administrator can create a FreeForm for entering that additional information and require that the form must be completed whenever the business card item is requested. The form then gets transmitted to the supplier with the order.

FreeForms can also be used for internal requests (e.g., vacation requests to the human resource [HR] department) or for very simple requests for quotations (RFQs, e.g., today’s price on a commodity) in which a supplier fills in the required information on a form related to a specific request. A FreeForm can be created in any HTML authoring tool (including Microsoft Word, to make it really easy). When ready, a FreeForm is uploaded to Epicor Procurement and the module automatically creates the database tables necessary to manage the fields that are included on the form.

Thou Shalt Remain Under the Budget

The feature that also gets the attention of prospects and customers is Epicor’s capability around “budgets and commitments.” This feature, which was breifly mentioned in Part 1, captures commitments not only from the Procurement module, but also from other sources of spend, including A/P and general ledger entries.

The Budget and Commitment Checking feature may deserve an article on its own. In a nutshell, the capability continually accumulates commitments from multiple sources that come from (not necessarily Epicor's) procurement, accounting and supply chain management (SCM) modules. An administrator can configure which sources to include as a commitment (against accounts) according to their business requirements.

The company can create business rules to define what exact transaction states constitute commitments. For some companies, perhaps a purchase order is not a commitment, but goods received but not yet invoiced are commitments. For others, perhaps only invoices are the first establishment of a commitment.

A raft of the budget control settings allow companies to specify what requisitioners are allowed to see in budget numbers. For their part, budget override authorities by title, similar to spending limits, determine “how high” in the hierarchy one has to route a requisition for approval based on how much a budget has been exceeded.

My intention in providing this level of detail is to point out how sophisticated and comprehensive this Epicor SRM capability is. The process is comprehensive, much more than a high-level integration between Procurement and GL/AP, and it is done in a way that allows for budgets or commitments to come from non-Epicor sources too.

To the end of the important premise of spend management (i.e., to stay under budget), the Budget View provides approvers with the opportunity to perform “what if” scenarios with all orders pending their approval to determine the optimal combination of approvals and disapprovals to meet budget control objectives. Last but not least, and also related here, Epicor SRM also features strong spend analytics capabilities.

What Is Not Quite as Impressive…

On the downside, if managed catalog service is a strong requirement, Epicor SRM not likely to win the deal. Epicor has customers who integrate Epicor Procurement to outside catalog services using the abovementioned Tap Out feature, but Epicor does not provide those services.

Furthermore, Epicor SRM includes only some basic contract management capabilities. The vendor has not pursued EIPP or supplier hubs mostly because it did not have full confidence that the investment would achieve a payback from the midmarket. Large corporations are there and ready, while the midmarket is not yet there according to Epicor’s findings. But the vendor claims to have a roadmap that will get it there and will continue to educate its customers toward those best practices after they have mastered the basics of spend management.

Epicor’s SRM experts have always contended that the ASN was important to Ariba and suppliers, but very light in content. Namely, it is an uphill battle to get suppliers to pick a single network where they keep information (including item and price catalogs) up to date. That costs a supplier money and time and there are no decent tools available to syndicate their data to multiple hubs.

Even though Ariba is the gorilla here, there are still many other bases a supplier needs to cover to transact with myriad buyers. Think of how many “supplier directory” publishers have come and gone over the years. To be honest, Ariba is doing what I think they should be doing as a leader in the space, and it might ultimately help its tier-one customers. If Ariba can figure out a way to democratize the data and monetize its delivery for the other over 90 percent of companies, Epicor will be listening and reacting.

In its response to Epicor's assertion, Ariba points out that the reality is these are not early days with the Ariba SIM solution as the vendor has been doing this for years now. The solution is only now packaged differently.

"Ariba has a comprehensive Supplier Management Solution launched seven years back to address Supplier business processes around Transactional enablement and help buyers evaluate Supplier performance using Ariba Supplier Performance Management solution and has hundreds of customers who use this solution successfully. Ariba Supplier Information Management, though recently unveiled joins the Supplier Management family and is intended to unite both the Transactional and performance aspects of Supplier Management.

Companies like Epicor have no choice but wait, since developing comprehensive Supplier Management solutions are not about technology, but about an eco-system which includes a robust Supplier Network, flexible and scalable services to help buyers manage suppliers executed using leading Spend Management technology."

Epicor perviously worked with a third party that provided integration to Microsoft Dynamics GP. Now, Epicor Procurement comes with a set of Web services that can be used to integrate to the SAP, Oracle (including PeopleSoft), and GEAC (now Infor) back-office systems.

As for the recently unveiled converged and Web 2.0-enabled Epicor 9 suite (which already includes strong buyer workbench and advanced purchasing capabilities), initially, Epicor will provide SRM integration to the new Epicor 9 Financials and SCM modules. Later, it will migrate it to the latest Epicor TrueSOA™ technology platform. Epicor completed its second-generation service oriented architecture (SOA) platform with the release of the ICE (Internet Component Environment) 2.0 framework alongside Epicor 9. Additional modules are planned for development, including Procurement and Sourcing applications.

Currently, Epicor provides single-tenant on-demand SRM deployment via managed hosting service of Epicor Procurement for some customers. The vendor is exploring the midmarket opportunity for multi-tenant software as a service (SaaS), but it doesn’t have any firm plans there yet. It will likely have subscription-based, multi-tenant SaaS offerings within the next generation SRM product suite, and my guess is that Sourcing might precede Procurement in this regard.

In my mind, Epicor Sourcing is a logical candidate to be offered as a cloud computing-based subscription/pay-per-play application. In order to get traction, Epicor might not even want to call it Epicor Sourcing but rather something like "Epicor Buyer Connect" or so.

There is quite a bit to think about here, including the potential for an Enterprise 2.0 (enterprise social software) aspect to it to monetize via industry templates or even supplier advertising. But this is only me postulating and speculating; time will only tell what Epicor will do for real here.

A separate blog post will analyze the brand new Epicor 9 suite’s functional and technical traits. Until then, what are your views, comments, opinions, etc. about the current economic climate in your region/industry and about your approach to curbing spend?

What are your best sourcing and procurement practices as well as experiences with particular SRM/spend management applications? If you are an Epicor Sourcing and/or Epicor Procurement user, I would appreciate you sharing your experiences with the product and the company.